Arhaus, Inc. Reports Second Quarter Results

August 10, 2026  by Karen Parrish in Business Strategy, Industry   

Second Quarter 2026 Highlights

Compared to the second quarter of 2025:

Net revenue increased 7.4% to $385 million

Gross margin increased 16.1% to $172 million and included a $23.8 million benefit from IEEPA tariff recoveries, of which $15.5 million related to inventory sold prior to April 2026

Selling, general and administrative expenses increased 16.1% to $118 million

Net and comprehensive income increased 13.1% to $40 million

Adjusted EBITDA increased 16.8% to $70 million and reflected the $23.8 million benefit from IEEPA tariff recoveries, of which $15.5 million related to inventory sold prior to April 2026

Comparable Delivered Sales⁽¹⁾ increased 4.0%

Comparable Written Sales⁽²⁾ increased 12.5%

John Reed, Co-Founder and Chief Executive Officer, said, “Exceptional product has been the foundation of Arhaus for 40 years, and our second-quarter performance reinforces how deeply clients value quality, craftsmanship, and personalization. Our newest collections are resonating, customization continues to gain momentum, and clients are engaging across our product categories. With an exciting product pipeline and compelling storytelling ahead, we believe we are well positioned to inspire more clients and continue our industry leading growth.”

Michael Lee, Chief Financial Officer, said, “Our second-quarter performance reflected disciplined execution across the business. We delivered results above the high end of our guidance range across our key financial metrics, generated strong Comparable Written Sales, and continued making meaningful progress on our digital transformation initiatives that support the next phase of Arhaus’ growth. As we look ahead, we remain focused on disciplined execution, investing thoughtfully in the capabilities that support long-term growth, improving operational efficiency, and creating long-term value for our shareholders.”

Business Highlights

Second quarter net revenue was $385 million, an increase of 7.4% year-over-year and above the high end of the Company’s guidance range.

Comparable Delivered Sales⁽¹⁾ increased 4.0% in the second quarter, also exceeding the high end of the Company’s guidance range, bringing year-to-date Comparable Delivered Sales⁽¹⁾ to 1.4%. Comparable Written Sales⁽²⁾ increased 12.5% in the second quarter, bringing year-to-date Comparable Written Sales⁽²⁾ to 2.8%.

Showroom Highlights

At the end of the second quarter of 2026, Arhaus operated 109 Showrooms across 31 states. During the quarter, the Company completed 4 Total Showroom Projects⁽³⁾, including 2 new Showrooms, with a Traditional Showroom in Ashburn, Virginia, and a Loft location in Ontario, California, 1 relocation in Westlake, Ohio, and 1 expansion in Lone Tree, Colorado. Notable updates include:

• Ashburn, Virginia – The Company opened a Traditional Showroom spanning nearly 20,000 square feet in a premium lifestyle destination. The Showroom features Arhaus’ full product assortment, extensive custom upholstery offerings, and a best-in-class design team.
• Westlake, Ohio – The Company completed the relocation of its Crocker Park showroom in Westlake, Ohio. Located in the Company’s hometown market, Crocker Park is a premier mixed-use lifestyle destination with strong demographics and a complementary luxury retail environment.

For 2026, the Company continues to expect to complete approximately 10 to 14 Total Showroom Projects⁽³⁾, consisting of 4 to 6 new openings and 6 to 8 relocations, renovations, or expansions, representing Net Unit Growth⁽⁴⁾ of mid-single-digits for the year.

IEEPA Tariff Recoveries

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). Subsequently, the U.S. Court of International Trade ruled that tariffs paid under the IEEPA must be refunded in accordance with the law. As a result, the U.S. Customs and Border Protection Agency launched a special tariff refund program to facilitate such refunds.

The Company has requested refunds of $37.8 million for IEEPA tariffs previously paid and believes recovery is probable. As of June 30, 2026, the Company recognized a receivable of $32.7 million, which is included in prepaid and other current assets within the condensed consolidated balance sheets. As of June 30, 2026, the Company received $5.1 million in cash for the refunds.

During the six and three months ended June 30, 2026, the Company recognized a benefit of $23.8 million for the recovery of IEEPA tariffs paid, of which $15.5 million related to inventory sold prior to April 2026 and $8.3 million related to inventory sold during the quarter, in cost of goods sold within the condensed consolidated statements of comprehensive income.

As of June 30, 2026, the Company recorded $14.0 million primarily related to the reductions in inventory costs in merchandise inventory, net within the condensed consolidated balance sheets.

As of August 6, 2026, the Company has received $37.8 million in tariff refunds and $1.3 million in interest.

Outlook

The Company is maintaining its full-year Net revenue and Comparable Delivered Sales outlook. The outlook continues to reflect uncertainty related to the consumer environment, geopolitical conditions, and the timing of written sales conversion to delivered sales. The Company is updating its full-year Net income and Adjusted EBITDA outlook to reflect the benefit recognized from the recovery of previously paid IEEPA tariffs. Consistent with its long-term capital allocation philosophy, the Company expects to reinvest a portion of these recoveries into strategic growth initiatives while also offsetting elevated operating costs, with the remaining benefit reflected in updated profitability guidance.

Conference Call

A recorded replay of the conference call will be available within approximately three hours of the conclusion of the call and can be accessed online at http://ir.arhaus.com for approximately twelve months.